Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging ofreceivables analysis.Days Past Due1 to 30$90,000Total31 to 6061 to 90Over 90Accounts receivablePercent uncollectible$36,000$570,000$396,000$18,0007%$30,00010%1%2%5%a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable toestimate uncollectibles, instead of the aging of receivables method.b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in theAllowance for Doubtful Accounts is a $12,000 credit.c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in theAllowance for Doubtful Accounts is a $1,000 debit.Complete this question by entering your answers in the tabs below.Req AReq B and CEstimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable toestimate uncollectibles, instead of the aging of receivables method.Estimated balance of allowance for uncollectibles

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Asked Oct 16, 2019
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Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of
receivables analysis.
Days Past Due
1 to 30
$90,000
Total
31 to 60
61 to 90
Over 90
Accounts receivable
Percent uncollectible
$36,000
$570,000
$396,000
$18,000
7%
$30,000
10%
1%
2%
5%
a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to
estimate uncollectibles, instead of the aging of receivables method.
b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the
Allowance for Doubtful Accounts is a $12,000 credit.
c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the
Allowance for Doubtful Accounts is a $1,000 debit.
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to
estimate uncollectibles, instead of the aging of receivables method.
Estimated balance of allowance for uncollectibles
<Req A
Req B and C
>
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Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Days Past Due 1 to 30 $90,000 Total 31 to 60 61 to 90 Over 90 Accounts receivable Percent uncollectible $36,000 $570,000 $396,000 $18,000 7% $30,000 10% 1% 2% 5% a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit. Complete this question by entering your answers in the tabs below. Req A Req B and C Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. Estimated balance of allowance for uncollectibles <Req A Req B and C >

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Expert Answer

Step 1

(a) Compute the balance of the Allowance for Doubtful Accounts under Percentage method:

 

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$570,000 Accounts receivables balance 4.50% Percentage of estimated uncollectible (S570,000 x 4.5%) $25,650 Estimated balance of Allowance for uncollectible

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Step 2

(b) Prepare the adjusting entry to record the bad de...

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Debit (S) Accounts titles and Explanations Credit (S) Date 31-Dec Bad debts expense $13,650 Allownace for doubtful accounts $13,650 |(To record the adjusting entry for bad debt expenses) $13,650 S25,650 - $12,000

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